Gold for May delivery eased 20 cents to $US1,293.30 a troy ounce, the lowest closing price since May 9, on the Comex division of the New York Mercantile Exchange.

Gold for June delivery, the most actively traded contract, also fell 20 cents, ending at $US1,293.40 a troy ounce.

US builders ramped up home construction in April, with housing starts rising 13.2 per cent for the month against expectations of a 3.1 per cent gain.

That's bad news for gold, an asset class that tends to attract investors in times of economic or political uncertainty.

Prices are down more than seven per cent from the March highs, as market participants are becoming convinced that a slowdown over the winter months was due to the weather, rather than a flawed economic recovery.

In other markets, palladium for June delivery rose 0.4 per cent to $US815 a troy ounce as a more than four-month-old strike at mines in South Africa continued with no resolution in sight.

BASE METALS

Nickel prices climbed as investors stepped in to buy the metal after a drop of more than 10 per cent in the previous two days.

Nickel for delivery in three months rose 1.6 per cent to settle at $US19,025 a metric ton on the London Metal Exchange.